New research: rising popularity of the franchise model with UK entrepreneurs
New research by Geek Retreat, the geek culture retailer, gaming café, community hub and events venue, shows that of the 15% of Brits who have set up their own business in past ten years, 27% considered a franchise model. Some 19% now run a business which is part of a franchise group.
A franchise is where a business gives the right to another person or business to sell goods or services using its name, offering all the benefits of being part of a larger group but offering the franchisee the opportunity to be their own boss.
The research also shows that 20% of Brits are considering setting up their own business in the next five years and, of these, 49% are considering a franchise model. When asked about the top three most appealing benefits of being part of a franchise business, 44% said the higher chance of success than in a sole proprietorship, 40% said the selling power of a known brand and 35% said the initial training and support.
The Geek Retreat franchise, which opened its first store in Glasgow in 2013, now has 36 stores compared to ten at the end of 2019, reflecting its huge popularity on the high street because it offers local communities and individuals a safe and inclusive place to enjoy their hobbies and interests.
Peter Dobson, CEO of Geek Retreat, commented: “Our research shows the growing popularity of the franchise model among people who want to start their own business. At Geek Retreat, we receive many requests from potential franchisees who recognise the value of the brand, its unique proposition and proven business model.
“We have also invested in creating our Franchise Success Team who are there to support our franchisees with everything from merchandise purchasing and customer service and to financial management and HR.”
Benefits of joining a franchise
Reduced risk – nothing in life is risk-free but joining a franchise is a safer and more reliable way of starting your own business than setting up from scratch. One fifth of new businesses in the UK do not make it past the first year and 60% of new businesses fail within the first 3 years. Only 33% of small businesses reach the 10-year mark. According to the British Franchise Association, the rate of failure for franchisors has stayed between 8-12% for over 22 years.
Reduced costs – the initial investment required for joining a franchise is often a lot less than starting from scratch and franchisees can tap into an established brand and systems and processes – saving time and money.
An established brand and customer base – with a franchise, customers will already know about the brand, although there will still be a need to promote the business in its new territory. There is also the opportunity to tap into national marketing campaigns and enjoy access to large scale coverage, such as TV adverts, that would be prohibitively expensive to pay for on your own.
Product innovation and R&D – established franchise brands have the manpower and capital to constantly research and develop new products and services to adapt to changing consumer trends. They are more likely to invest in entirely new products and services to help to keep their business one step ahead of the competition.
Purchasing power – whether it is new merchandise or supplies for the café, franchisees benefit from the enhanced purchasing power of the bigger group. As the cost-of-living crisis bites and suppliers are asking more for their goods and services, every penny counts.
Support – many people aspire to run their own business and franchising makes this a reality. Franchisees have all the benefits of being their own boss but are also part of a larger network of like-minded individuals and industry experts who can help solve problems, share ideas and best practice. This makes maximising the earning potential of a new franchise much quicker.
